Chapter 1301:9-1 Supervision and Examination

1301:9-1-01 Definitions.

(A) "Business day" means any calendar day that is not a Saturday or Sunday or a legal holiday. "Legal holiday" has the same meaning as in section 1.14 of the Revised Code.

(B) "Current earnings" means revenues less operating expenses before all insurance assessments or corporate stabilization expenses.

(C) "File" or "filing" means the day on which any correspondence or other document is received at the Ohio department of commerce, division of financial institutions.

(D) "GAAP" stands for "Generally Accepted Accounting Principles."

(E) "Immediate family" includes a spouse of the official or employee, or the official or employee's child, parent, grandchild, grandparent, brother or sister, or the spouse of any such individual.

(F) "Mail ballot" includes an electronic ballot.

(G) "Net worth" means retained earnings as defined by the American institute of certified public accountants ("AICPA"). Retained earnings normally include undivided earnings, regular reserves and any other forms of capital approved or appropriations designated by regulatory authority.

(H) "Service facility or service facilities" as used in Chapter 1733. of the Revised Code includes a shared service facility and any additional credit union office, agency, or any branch place of business at which member accounts are established or loans are made.

Replaces: 1301:9-1-01

Effective: 03/22/2012
R.C. 119.032 review dates: 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.01 to 1733.99
Prior Effective Dates: 7/1/2006

1301:9-1-02 Notice as to adoption, amendment or rescission of rules.

(A) Reasonable public notice shall be given in the register of Ohio at least thirty days prior to any hearing regarding the proposed adoption, amendment or rescission of rules for credit unions.

(B) The notice shall include:

(1) A statement that the superintendent intends to consider adopting, amending, or rescinding a rule;

(2) A synopsis of the proposed rule, amendment, or rescission or a general statement of the subject matter to which the proposed rule, amendment, or rescission relates;

(3) A statement of the reason or purpose for adopting, amending or rescinding the rule; and

(4) The date, time and place of the hearing on the proposed action.

(C) In addition to public notice required by paragraph (A) of this rule the superintendent may provide whatever other notice he or she reasonably considers necessary including:

(1) By publication in a financial institutions industry publication of general circulation in Ohio ;

(2) By publication in one or more newspapers of general circulation in Ohio;

(3) By mailing electronically or otherwise notice to affected credit unions;

(4) By electronic posting on the website of the department of commerce; or

(5) By mailing notice to the state trade association for credit unions in Ohio.

(D) In addition to the notice required by paragraph (A) of this rule, the division of financial institutions shall mail a copy of the notice to any person who requests it and pays the expense of postage and copying.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.41
Prior Effective Dates: 9/1/79, 7/1/06

1301:9-1-03 Supervision, examination and annual financial report.

(A) Credit unions utilizing computers shall adopt as a minimum, the following policies:

(1) An electronic information policy which shall provide for operating procedures, practices and purchases of devices used for information technology. These policies and procedures shall serve as an overall plan and analysis of how the system benefits the credit union. In addition, these policies and procedures shall provide guidance and uniformity to the credit union's management.

(2) A security policy which shall provide for the data and physical security needed to ensure that member data obtained by credit unions is safeguarded at all times.

(3) A data backup and recovery policy which, ensures that the credit union is able to recover members' data in the event that data is corrupted or lost.

(4) A contingency/disaster recovery policy and plan which shall provide for procedures for interruption of computer operations and tests for ability to recover both hardware and software. The policy should include a business continuity plan to ensure that the various business lines are aware of their responsibilities in the event of an unanticipated incident or disaster affecting the daily business of the institution. At a minimum, management must ensure that the provisions within this policy are tested on an annual basis.

(5) A policy to notify regulators, insurers and members within five days of any known breach of member data.

(6) Credit unions utilizing a servicer shall have a contract which provides for ownership of the data base, minimum notice for cancelling the contract, and a plan for obtaining a copy of the electronic information security policy and regular audit of the servicer periodically, a copy of the backup and recovery plan, and a disaster plan to ensure solvency and continued service. The contract shall also, provide the superintendent with complete access to any books and records of the servicer, as deemed necessary by the superintendent in carrying out his or her responsibilities.

(B) A credit union shall provide to the superintendent annually, within ten days after it holds its annual meeting and reorganization meeting, a roster of directors, officers and senior management personnel.

(C) Within ten days after the board of directors appoints a director to fill a vacancy, elects a new officer or officers, or appoints or approves a senior management employee, the credit union shall notify the superintendent in writing of the change.

(D) Credit unions operating under a supervisory agreement or letter of understanding and agreement, shall notify the superintendent in writing, at least fifteen days prior to the date any change in the position of director, officer, committee member or any senior management personnel takes place. The notice shall include the position that the person will be assuming and a detailed resume. An individual shall not assume a position and related duties until after the superintendent has approved such change in writing. Immediate notice shall be given to the superintendent of resignations of directors, officers or senior management.

(E) The annual financial report required by division (C) of section 1733.32 of the Revised Code shall be filed upon the date designated by the division of financial institutions in a notice mailed to each credit union at least thirty days in advance of the filing date. If a credit union fails to file its annual financial report by the filing date, the superintendent may assess a fine in accordance with paragraph (I) of 1301:9-1-04 of the Administrative Code. In accordance with division (B) of section 1733.32 of the Revised Code, a credit union shall submit a financial report to the division when requested by the superintendent within thirty days of the superintendent's request. If the credit union fails to comply with division (B) of section 1733.32 of the Revised Code, the superintendent may assess a fine in accordance with paragraph (I) of 1301:9-1-04 of the Administrative Code.

(F) By the due date indicated on the examination acknowledgment page, the president or chairperson shall respond to the superintendent in writing, satisfactorily addressing all of the concerns detailed in the examination report and all actions taken to address these concerns. Each member of the board of directors and the chairperson of the supervisory audit committee, if applicable, shall acknowledge receipt of the examination by signing the examination acknowledgement page. This signed page must be returned to the superintendent by the due date indicated on the examination acknowledgment page. Any extensions to the due date of the examination response shall be made to the superintendent in writing before the original due date. All written requests for an extension of time to complete the examination response shall include reasons why the examination response cannot be submitted in a timely manner, as well as when it is expected the response will be received by the superintendent.

Replaces: 1301:9-1-03, part of 1301:9-1-04

Effective: 03/22/2012
R.C. 119.032 review dates: 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.32
Prior Effective Dates: 8/3/93, 7/10/98

1301:9-1-04 Supervisory fee.

(A) Each credit union engaged in operations as of January first of a calendar year shall pay the supervisory fee described in division (E) of section 1733.32 of the Revised Code, based on a percentage of the gross assets of the credit union, as shown by its last annual financial report, by the following groupings:

(1) The amount from $1 to $125,000 of the credit union's gross assets shall be billed at a rate as established by the superintendent;

(2) The amount from $125,001 to $4,000,000 of the credit union's gross assets shall be billed at a rate which is not less than one-fiftieth of one per cent, or .20 per $1,000 and not more than a rate of one-ninth of one per cent, or 1.11 per $1,000;

(3) The amount from $4,000,001 to $30,000,000 of the credit union's gross assets shall be billed at a rate which is no greater than one-sixteenth of one per cent, or .62 per $1,000;

(4) Any amount above $30,000,000 of the credit union's gross assets shall be billed at a rate which is no greater than one-twentieth of one per cent, or .50 per $1,000.

(B) "Gross assets" are defined as total assets, plus the allowance for loan loss account, plus the allowance for investment loss account.

(C) In accordance with division (E)(4) of section 1733.32 of the Revised Code, the total amount of each semiannual billing to all credit unions combined shall equal one-half of the appropriation made by the enactment of the State's Main Operating Budget Act or any correction thereto, including any modifications made by the controlling board. In determining the supervisory fees the superintendent may take into consideration any funds lapsed from the appropriation made in the previous fiscal year.

(D) New charters - a newly chartered credit union is not required to pay a supervisory fee in the calendar year in which its legal existence begins.

(E) Conversions - a federal credit union which converts to a state chartered credit union is not required to pay a supervisory fee in the calendar year of the conversion. A state chartered credit union which converts to a federal credit union shall not receive a refund of any supervisory fee paid to the division prior to the effective date of the conversion.

(F) Mergers - a credit union which merges with a state chartered or federal credit union shall not receive a refund of any supervisory fee paid to the division prior to the effective date of the merger. The superintendent may waive payment by a credit union of the supervisory fee which has been assessed, but not paid, for good cause shown, prior to the superintendent's final approval of a merger., .

(G) Voluntary dissolution or appointment of a liquidating agent - a credit union which files a certificate of dissolution or for which a liquidating agent is appointed shall not receive a refund of any supervisory fee paid to the division prior to the filing or appointment. The superintendent may waive payment by a credit union of the supervisory fee which has been assessed, but not paid, for good cause shown, prior to the filing of a certificate of dissolution or when a liquidating agent is appointed..

(H) Each credit union shall remit the supervisory fee within thirty days after billing. If the credit union fails to remit the supervisory fee by the thirtiethday after the date of the division's billing, the superintendent may assess a fine in accordance with paragraph (I) of this rule.

(I) Pursuant to paragraph (H), of this rule and paragraph (E) of rule 1301:9-1-03 of the Administrative Code, the superintendent may impose a fine of not more than five hundred dollars for each day the credit union is late in submitting a financial report or supervisory fee. In determining the amount of the fine to be assessed the superintendent shall consider all of the following:

(1) The credit union's asset size and financial resources;

(2) The seriousness of the violation;

(3) The credit union's good faith efforts to prevent the violation;

(4) The credit union's history regarding violations of this rule; and

(5) Any other matters the superintendent considers appropriate in enforcing section 1733.32 of the Revised Code and this rule.

Effective: 03/22/2012
R.C. 119.032 review dates: 12/29/2011 and 03/22/2017
Promulgated Under: 119.03
Statutory Authority: 1733.41
Rule Amplifies: 1733.32
Prior Effective Dates: 8/3/73, 7/10/98